Cost per Mille (CPM)
What is Cost per Mille (CPM)?
Cost per Mille (CPM) is how much an advertiser needs to pay, to show their ad to a thousand people.
Cost per Mille literally means Cost per Thousand, coming from the French word for thousand: Mille.
Why is CPM important?
Advertisers want to show their ad to as many people of their target audience as possible. CPM allows an advertiser to understand the cost of showing their ad to an audience. Because CPM is an industry standard, it allows an advertiser to compare different prices against a single price-point: CPM.
How does one calculate CPM?
To calculate CPM, you will need:
- The advertising spend
- The number of impressions
Then, calculate it as follows:
CPM = spend × 1000 ÷ impressions
Rachel spent $750 on her advertising campaign and 150,000 people saw Rachel's ads. To calculate the CPM, do the following:
CPM = spend × 1000 ÷ impressions CPM = $750 × 1000 ÷ 150,000 CPM = $5
CPM is just one way to purchase/bid for advertising. CPC and CPA are the other most popular ways to do this: